NUTSNEAL, Thanks your post. My comm.. is about is below 4 rt all in(my broker has requested it to be confidential), I am looking for 3 all in now since my vol can easily reach 2k / month. In naked trading I average $10k per car, in pairing I use 5 to 15. You are quite right, the success depends on the ability to cut the losses short. Please not the daily goal schedule Iâll supply below which would bring down my vol and reduce risk. thanks
After utilizing basic Money Management methods, it soon revealed a very major pitfall with my trial goals. To achieve an average of 2% on daily bases without compounding on an initial capital of $18,000 would require a $360 gain per day for a period of 264 days(22 days/month*12=264) would come to 22 * 360 = $95,040.00. At the same time, it is quite obvious that after the first day, the capital at hand is growing and it will work like a time bomb against the trader since the mind cannot handle the psychological aspects of this growth and sticking to the 360 per day and not get carried away etc., such humongous gain objective of (2%*264 =) 528% per year must broken down over the 1 year period of time in order to accordingly prepare the trader for such growth and make sure he/she is getting enough screen time and assuring the end result to translate to 2% average daily gain. To make it short, I have designed the following daily objectives, which start from $181 on day 1 and ends at $658 gains on Day 264, to assure endurance and consistency by following a wiser plan. Day #/Daily Gain/CumSum 1 181 181 2 182 363 3 183 545 4 183 729 5 184 913 . . 96 284 21,936 97 285 22,221 98 286 22,508 99 288 22,796 100 289 23,085 . . 200 465 60,175 201 467 60,642 202 469 61,111 203 471 61,582 204 474 62,056 . . 260 618 92,502 261 621 93,122 262 623 93,746 263 626 94,372 264 629 95,001
Just a quick comment. First, I think it is possible to make 2% per day in the ES. I think the amount you're trading with is more or less irrelevant to whether you make 2%, except when the account gets too big. But for accounts up to let's say $100K, I think it can be done. What makes this type of return possible is a couple of things. One is leverage. For instance, on a $20K account I think a guy trading 4 contracts could conceivably average $400 per day. But the next issue is that leverage means risk. And unless you're disciplined, this leverage will be your undoing. And of course finally, you have to have a technique that actually gives you the edge to generate consistent returns. Now, an observation. You're not providing a whole lot of information. But based on what I hear, I would be concerned about how all of this is going to work out for you. When you say you make "72 trades" for instance, to me I understand this as 72 roundturn trades. Now maybe you don't mean that. Maybe what you really meant is that you actually made 12 trades, with 6 contracts each. See what I mean? One day you said you made "33 trades". Your statement shows 33 ES, and 40 ER2. So I gather that this day you made 33 trades of 1contract, hedged somehow by 40 ER2. Whatever, it appears that you are making one helluva alot of trades. And evidently each of those trades is hedged, which means that you create double commissions, and double friction in the market from bid/ask spread and slippage. I also note you've had some very large losses in relation to the gains that you have made (on a daily basis). No details on what took place on those days, but something is really out of whack here. Either you had some lapses of discipline, or something is wrong with the strategy. But to compare, I don't hedge. I'm purely a directional trades. I would say that most of the time I don't need to make over 5-10 round-turn trades in a day. Once in a while maybe. Less is more though. Alot depends on volatility, but I'm looking typically for 5-10 handles in a trade on the ES, generally not risking more than 2-3 depending on the trade. Talking here about daytrades by the way, not swing trades which is a somewhat different animal. Just throwing all this out there. It is possible to do what you suggest. I'm concerned though about what looks to be alot of overtrading. As one who has traded this market most days since 1982 in the S&P futures, I just don't believe there are that many good trades in a day. And if your system is actually generating that many, I gotta question it. Equally, I agree with the poster who suggested that the hedging simply detracted from the basic trade. You as much as confirmed that at one point saying that if you were long, and then got a sell signal, you would hedge, etc etc. All that means is that rather than to get out (the disciplined method), you hedge with another instrument so that you don't lose on the original. I think that sounds like a weakness to me. By the way, there are spread traders who happen to trade that way. Some do very well. Anyway, just throwing some of this out there without knowing what your strategy is, or how you're trading at all. If none of it makes any sense, just discard it. OldTrader
OldTrader: it was me who tried to explain that hedging etc. does nothing more, but generate more commissions. And I totally agree with your points. To me making like 100+ trades a day and this way making less money than you've paid in commissions also seems a bit illogical. 2% a day is not that much to do so many trades and pay so much to your broker for that. Unless you're affiliated with the broker and trade OPM... LOL (just joking). Plus losses related to gains really look like a bit too much. Probably it is a consequence of overtrading and bad R/R because losses are not limited enough related to gains. (Crosslinking with stop-losses discussion). TradStSOX: I in no way want to abuse or question your strategy, indeed spread trading is a good way for many traders. If if that is your method (watching when two indexes are out of sync and spreading them) then my points have no reason (seems like you still need a bit better quality of trades and R/R though). But what I see from my point, I simply express here because I hope it can somehow help you to better reach your goals. Good luck in making what you plan to!
What kind of BBBBBSSSSSSS is that . Give me a break!!!! If you don't want to say then just say so but don't put out that kind of crap!!!!!
Wasn't going to comment, but hedging works. You just have to know how to use it, and most likely on another instrument. Like options and equities, hedges are put on all the time.